5 lessons for CIOs in the age of the cloud

Kevin Ledford has been CIO of Chiquita Brands(s cqb) for five years. This is the company that brings all those bananas and pineapples to your table — and tons of fresh produce to restaurants and food services.

Founded in 1899, Chiquita is proof positive that use of cloud — at least in the form of software-as-a-service (SaaS) products — is no longer just the province of startups and web 2.0 companies. The adoption of these technologies is integral to how older, established companies compete. And it’s a big part of how Chiquita manages its complex and time-sensitive supply chain (how much is a rotten banana really worth?) and how it pays its 21,000 employees.

Advertisement

Here are five things I learned from a recent chat with Ledford:

1: Go cloud first.

For new applications, Chiquita goes to the SaaS model right off the bat. Chiquita was also an early user of Workday(s wday) human resource management software which it uses to manage its North America payroll, for project management, talent management and some time tracking. It started down the SaaS route years ago when it implemented LeanLogistics transportation management system.

In terms of running on-premises IT and cloud, Chiquita is still a mixed shop but “anything new is pretty much going to SaaS or PaaS (platform as a service),” he said in an interview.

In Ledford’s view, smart use of SaaS is the great equalizer that lets smaller companies roll out features and functions systems that are every bit as good as what the big boys can do. And while the SaaS sales pitch has evolved from the ability to pay per user per month to more of a long-term enterprise software contract, the advantage remains that Chiquita does not have to sweat hardware or software upgrades for its SaaS portfolio.

2: Avoid vendor lock-in.

By dint of Oracle’s amazing M&A run of the past decade, Chiquita — which uses or used Hyperion, BEA Systems and PeopleSoft/JD Edwards — found itself perhaps a little too reliant on one company.

“We’re a big brand but we’re a mid-sized company — about $3.2 billion. We like to go with vendors that are not so big that we get lost in the shuffle. Bank of America and Wells Fargo can push IBM around, we can’t.”

Lessening its reliance on one provider is one reason it’s likely moving to Tidemark from Hyperion.

Kevin Ledford, CIO of Chiquita

3: Have a sound middleware layer.

As companies acquire and merge with each other, they have to incorporate new IT systems and make them fit. For Chiquita that’s the Java-based WebLogic (now Oracle) middleware. If that’s in place you can mix and match SaaS and on-premises IT as needed.

4: Don’t rip things out just for the heck of it (or because a new vendor tells you to.)

Said Ledford: “Invoicing and accounts receivable hasn’t changed much in 80 years, so why buy a new system every ten years to support the same old functions?” Again, a solid middleware layer means you can integrate the oldie-but-goodie gear with the shiny new SaaS stuff.

5: Don’t buy into the CMO threat

A good CIO knows he has to be responsive to the internal customer — if that job gets done, no problem. But if not, well, all bets are off and a stronger leader –maybe the much-hyped CMO — will win out.

“If you’re still trying to run mainframe on-premises stuff that nobody wants, then people will go off and do it on their own,” he said.

In short, if the CIO gives the people what they want, he has nothing to worry about.

The ability to go to the cloud while also supporting legacy tools, has been a focus for us. Over the past few years we’ve seen a huge increase in the number of our clients considering and deploying cloud based applications. The challenge has been managing across those different environments, but if you find the right vendor to partner with you can get a full view across your entire infrastructure (public cloud and on-premise).

As companies look beyond simply SaaS, they should also look to make sure their staff are skilled in managing a cloud based infrastructure. We’ve recently done some research and our findings indicated that employee skillets are not keeping up with the demand of cloud computing and its adoption. The article on our findings, and access to the results can be found here:

Looks like Box took notice of Chiquita’s cloud enthusiasm. They nabbed, Manjit Singh, former CIO at Chiquita Brands to head up its consulting team’s retail, consumer packaged goods and hospitality segments.

As much as Kevin cites “middleware” as if solves integration issues between legacy and SaaS and legacy and legacy systems, such integrations are extremely expensive and require an awful lot of coding and attention. In most cases you will find silos of data even though there’s an abundance of middleware. I think the phrase he might be looking for is “enterprise service bus.” Now those don’t come cheap either. And any kind of ESB project will require executive sponsorship or it won’t get done. In terms of giving people in the enterprise what they want: among other things they want to be able to access data, transform it, route it, and use it both in on premises and SaaS and Cloud applications. In my opinion, “Cloud First” is a policy that provides no clear strategy and assigns responsibility to nobody. Cloud First sounds like forward thinking, but in practice it can be indistinguishable from no Cloud strategy at all.

SaaS may seem like Cloud, but larger enterprises like McGraw-Hill have been leveraging IaaS for significant Production applications for several years. This story does capture some good lessons. However I also think CIOs need to recognize that it’s later than they think.